Legal & Regulatory

EPA Reinterprets ‘Ambient Air,’ Further Tweaks New Source Review 

The Environmental Protection Agency (EPA) has finalized a change to a long-standing policy interpreting “ambient air”—a foundational concept under the Clean Air Act that applies to all types of air pollution, from ground-level ozone, particulate matter, and greenhouse gases. While the agency framed the change as part of a suite of actions to reform New Source Review (NSR) permitting requirements, environmental groups decried the measure as the Trump administration’s newest effort to weaken the agency’s ability to monitor and model air pollution. 

Under the Clean Air Act, the EPA is required to set national ambient air quality standards (NAAQS) and prevention of significant deterioration (PSD) for pollutants that are common to outdoor air, which are considered harmful to public health and the environment. The law calls for new and existing  stationary sources—including power plants—to use the best available technology to meet strict standards, but because neither NSR rules nor modeling guidelines define “ambient air,” the EPA has to date defined it per the code of federal regulations as “that portion of the atmosphere, external to buildings, to which the general public has access.” 

But in a final guidance document, “Revised Policy on Exclusions from ‘Ambient Air,’ ” which EPA Administrator Andrew Wheeler signed on Dec. 2, the agency tweaks its interpretation of that definition, specifically as it allows for exclusions of certain areas of a source’s property from ambient air. 

As Wheeler wrote, the EPA has long followed a policy outlined in a 1980-letter from then Administrator Douglas Costle to Congress that says, “exemption from ambient air is available only for the atmosphere over land owned or controlled by a source and to which public access is precluded by a fence or other physical barriers.” In its final policy revision, the EPA essentially removes “fence or other physical barriers,” and replaces it generally with “measures”—which may or may not include physical barriers to support exclusion of an area from ambient air. Wheeler reasoned: “a fence or other physical barrier is not the only type of measure that may be used to establish that the general public does not ‘have access’ to an area of land that is owned or controlled by a source.” 

The EPA’s revised ambient air policy is now “consistent with its discretion available under the regulatory definition of ambient air,” he wrote. The policy now reads: “the atmosphere over land owned or controlled by the stationary source may be excluded from ambient air where the source employs measures, which may include physical barriers, that are effective in precluding access to the land by the general public.” 

In other words, the EPA said, the guidance essentially seeks to recognize that an “industrial facility owner or operator may use a variety of effective measures to keep the public off facility property,” and it takes into account advances in surveillance and monitoring from drones and other technologies.

However, it stressed that the revised policy does not amend the encoded definition of “ambient air”—only the EPA or another air agency can determine what “measures” are adequate to exclude any portion of a source’s property from ambient air, and these will likely be determined on a case-by-case basis “after consideration of the relevant administrative record,” it said. 

According to environmental group Environmental Defense Fund (EDF), however, with the new definition, the “EPA is now attempting to upset [its] longstanding approach by expanding exemptions that would allow an industry to emit more pollution into the outdoors as long as the pollution technically goes into the air at a site it owns, and as long as the source posts warning signs or ‘deploys other measures.’ ” EDF attorney Rachel Fullmer explained: “EPA is adopting a deeply flawed approach that would ignore harmful levels of air pollution if that pollution occurs within land owned by an industrial source. However, there is no ‘public’ or ‘private’ air. EPA’s action will result in more pollution in the air we breathe.”

EDF also said that the EPA did not open a “formal public comment period” on the change. In his memo, however, Wheeler said the EPA made its reinterpretation after “considering a wide range of stakeholder comments,” and that it received 37 sets of comments between Nov. 18, 2018 and Jan. 11, 2019. 

Some commenters argued that the EPA’s historic focus on a “fence or other physical barriers” is outdated because it does not address or allow consideration of additional security technology and other measures which could keep out the general public, such as routine security patrols, remote surveillance cameras, and drones. Others noted that a fence or physical barrier are not mandated by the regulatory definition of ambient air, Wheeler wrote. Some stakeholders, meanwhile, argued that exemptions for fenced land was contrary to law, and that the regulatory definition should be revised through rule making to eliminate or narrow the exclusion for areas external to buildings. 

The EPA’s evaluation of these comments boiled down the issues to three core concepts: “access,” “general public,” and “external to buildings,” Wheeler said. After considering how each of these terms had been applied under the existing ambient air policy, the EPA concluded that it is “reasonable and appropriate” to update its ambient air policy to include “greater flexibility in light of developments and experience since the 1980 letter, while at the same time ensuring that the public health protection afforded by the 1980 letter is maintained.” 

Part of a Suite of Significant NSR Reforms

The final guidance comes on the heels of several other significant steps the EPA has taken of late to clarify NSR permitting requirements—Clean Air Act rules that govern air quality at construction projects, and often, determine how they are operated. 

On Nov. 26, it issued another final guidance: “Interpreting ‘Adjacent’ for New Source Review and Title V Source Determinations in All Industries other than Oil and Gas. Separately, it also proposed changes to correct “minor errors” in four NSR regulations, a measure it said will provide regulatory certainty and clarity but which it considered to be “non-substantive.” And in a press release on Tuesday, the EPA also noted that it is working to take final action on a 2016 proposal to revise regulations in the Title V permitting program. 

The final “adjacent” guidance stems from a September 2018 memo that sought to constrain the definition of “adjacent source.” Previously, the EPA treated two or more facilities located on adjacent properties as one source, which often made them a “major source,” triggering Title V permitting. 

In her Nov. 26–issued memo attached to that guidance, EPA Acting Assistant Administrator Anne Ideal wrote that “uncertainty” exists regarding the term “adjacent,” which has resulted from court decisions and case-specific letters from the agency over many years. The revised definition applies the agency’s original interpretation expressed in the 1980 development of the PSD portion of the NSR program.

“From this point forward, EPA will consider properties that do not share a common boundary or border, or are otherwise not physically touching each other, to be ‘adjacent’ only if the properties are nevertheless nearby, side-by-side, or neighboring (with allowance being made for some limited separation by, for example, a right of way),” she wrote. 

The proposed changes to “minor errors,” signed by Wheeler on Nov. 22, seek to “correct typographical and grammatical errors, remove court vacated rule language, remove or update outdated or incorrect cross references, conform certain provisions to changes contained in the 1990 Clean Air Act (CAA or Act) Amendments, and remove certain outdated exemptions” in its PSD regulations. While it says the changes “simply reflect” a tweaking of statutory language, it adds definitions for the terms, “replacement unit,” and “process unit,” as well as criteria for “basic design parameters.” 

The Complexity and Ambiguity of NSR

The new guidances add to nearly 600 EPA-issued policy and guidance documents that the agency has released over the years to help regions, states, and project builders implement NSR rules. The pre-construction permitting program was established in the 1977 Clean Air Act amendments (which became effective in 1980) to ensure air quality standards are maintained nationwide, and that projects install state-of-the-art technology at new plants or existing plants undergoing major “modifications.”  

But industry has for years decried the complexity and ambiguity of the program. While the rule applies to a variety of facilities—from paper mills and plastic production to power plants—the power sector has prominently urged reform of the rules, noting that a stricter interpretation of the rule adopted by the agency in the mid-1980s has made it more challenging to improve the efficiency of their units without triggering NSR enforcement. 

While the pace of enforcement has slowed in recent years, experts note that some litigation continues, and key legal issues remain unsettled. To the chagrin of environmental groups, the Trump administration has attempted to loosen some of the rule’s requirements. In December 2017, for example, it released a policy memo stating it would no longer re-examine industry’s projections of the emissions increases that result from a modification of a facility, leaving industry to ensure the accuracy of its emissions projections. 

In March 2018, it released another memo outlining changes to its method of calculating emissions projections in Step 1 of the NSR process—which seeks to determine if a modification “by itself” results in a significant emissions increase. The measure allowed plant operators to consider emissions decreases as well as increases. Decreases were previously not considered until Step 2—which determines if the modification results in a significant “net” emissions increase. The EPA formalized the measure in its August 2019–proposed rule, “Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR): Project Emissions Accounting.” 

In April 2018, meanwhile, it moved to narrow the determination of “common control” to focus on “the power or authority of one entity to dictate decisions of the other that could affect the applicability of, or compliance with, relevant air pollution regulatory requirements.” As experts noted, a narrowed interpretation subjects fewer sources to NSR requirements, because facilities’ emissions will be considered separately rather than jointly when determining NSR applicability.

Then in August 2018, as it rolled out its proposed Clean Power Plan replacement rule (the Affordable Clean Energy [ACE] rule), the EPA sought to furnish states with an hourly emissions test to determine whether emissions will increase sufficiently to trigger NSR before the existing annual test—but it scrapped those changes in the final rule issued this June, promising to take final action on NSR reforms “at a later date.”

Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine)

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